Nav Canada Announces Rate Reductions for ATC Services

 - July 20, 2016, 3:08 PM
Nav Canada controllers are shown in the control tower at Vancouver International Airport. (Photo: Nav Canada)

Nav Canada, the air navigation service provider (Ansp) often held up as a model for a restructured U.S. ATC system, will revise its service charges for the first time in nearly a decade. The rate revisions will reduce service charges by 7.6 percent on average, the Ansp announced on July 18.

A private, non-share corporation that was spun off from regulatory agency Transport Canada in 1996, Nav Canada last revised rates in August 2007. The latest revisions, which include changes to base rates for terminal, enroute and oceanic ATC services as well as a temporary one-year rate reduction, take effect in September.

The 7.6 percent average reduction in Fiscal Year 2017 results from combining the temporary rate reduction with the ongoing base-rate changes. Changes in the base rates will result in an average reduction of 3.9 percent, Nav Canada said.

“These changes enable us to meet our cost recovery mandate by aligning our revenues with our costs going forward,” said Neil Wilson, Nav Canada president and CEO. “Strong traffic growth, coupled with cost controls and targeted strategic investments in the air navigation system, has put us in a position to deliver savings to customers while increasing our planned investments in people, technology and facilities.”

Nav Canada’s cost recovery mandate is intended to preserve the organization’s not-for-profit status; it requires that “charges must not be set at a level that, based on reasonable and prudent projections, would generate revenues exceeding the Corporation’s current and future financial requirements in relation to the provision of civil air navigation services.”

The new base rates include a 1 percent increase for terminal services, a 7.3 percent reduction for en route services including overflights, a 6.5 percent reduction in the North Atlantic service charge, and a 13.7 percent reduction in the international communications charge, the Ansp said.

The base rate for terminal services, which is applied to flights departing from airports staffed by Nav Canada personnel, rises from $23.90 Canadian to $24.14, but with a temporary rate adjustment it will be $23.21 in September. The North Atlantic charge is for the provision of air navigation services to an aircraft flying in oceanic airspace managed by the Gander control center; it will decline from $93.24 to $87.18, temporarily adjusted to $83.81.

The international communications charge is for air-to-ground HF radio and datalinks that are made available to an aircraft during the course of an international flight, other than a flight between Canada and the continental U.S. About 90 percent of all communications with flights in the Gander airspace are by datalink, Nav Canada said. The datelink base rate will decline from $22.04 to $19.02, with a temporary adjustment to $18.28.

Nav Canada has been cited by proponents of ATC restructuring in the U.S. as providing a better business model than the current system operated by the Federal Aviation Administration and funded by federal aviation taxes. Nav Canada is governed by a 15-member board that includes four directors elected by the National Airlines Council of Canada; four independent directors elected by the board; three by the federal government; two by employee unions; one by the Canadian Business Aviation Association and the CEO.

The Canadian Ansp reported Fiscal Year 2015 revenue of C$1.28 billion ($980 million).